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Micro-Insurance: A Poverty Reduction Tool

Micro-Insurance: A Poverty Reduction Tool. Presented by: Freda du Toit Derek Pead. AIO Life Seminar 2008. What is micro-insurance?. Protection of low-income people against specific perils in exchange for regular premium payments. Delivered through a variety of

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Micro-Insurance: A Poverty Reduction Tool

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  1. Micro-Insurance: A Poverty Reduction Tool Presented by: Freda du Toit Derek Pead AIO Life Seminar 2008

  2. What is micro-insurance? • Protection of low-income people against specific perils in exchange for regular premium payments. • Delivered through a variety of channels, including non traditional and community based; • With the aim of increasing the ability to deal with risk

  3. Impact of shocks With risk management options Shocks Poverty line Safety net Without risk management options

  4. The focus of micro-insurance Risk-management measures Micro-insurance Social protection

  5. What is social protection? • Social security is • Compensation for absence of income resulting from contingencies e.g. Sickness, injury • Provision of healthcare • Provision of benefits to families with children • Social protection • Provides similar benefits • Social protection = social risk management • Complimentary to government initiatives

  6. Micro-insurance products

  7. One size does not fit all • Difference in needs, e.g. Funeral expenses • Different insurance priorities for different market segments, e.g. Cover for spouses • Need to: • Mitigate loss from insurable risks • Help build and protect assets • Broaden social protection

  8. Principles for Innovation • Good product service to overcome apprehension for upfront payment • Combine advanced technologies with existing infrastructure • High volume, low margin drive • Process innovation • Collaborative distribution • Challenge conventional wisdom

  9. Understanding the demand formicro-insurance • Understand client needs • Differ per country • Product-specific research • Develop products in conjunction with clients • Size of the potential market • The need for volumes

  10. Marketing micro-insurance • Marketing message • Protection for the vulnerable • Optimism • Trust • After-sales service • Marketing techniques • Raise awareness • Increase understanding

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